Agency’s billboard fees plan sets stage for row with counties

What you need to know:

Advertising firms in major towns will be expected to pay a service fee to the counties and in addition foot part of the power bills on streets where they have erected their billboards.
KeNHA said that the policy — Roads Reserves Utilisation would enable it to raise revenue for some of its operations.
The modalities on how the fee would be charged on the billboards would be finalised soon.

The Kenya National Highway Authority (KeNHA) is working on policy that will see it start charging billboards placed along the road reserves in a move that is expected to increase the costs to of advertising.

Advertising firms in major towns including Nairobi, Mombasa, Kisumu and Eldoret will be expected to pay a service fee to the counties and in addition foot part of the power bills on streets where they have erected their billboards.

KeNHA said that the policy — Roads Reserves Utilisation would enable it to raise revenue for some of its operations.

The agency said the county governments would only in charge of issuing the licences to place the billboards when the policy comes to effect when the policy is effected while it would be charging the firms based on the size of the billboards.

The modalities on how the fee would be charged on the billboards would be finalised soon.

KeNHA Asset Protection Unit manager John Otiato said that the agency would first work on a policy to align the Roads Acts with the current Constitution in order to enable it establish the Roads Reserves Utilisation policy, then work with the respective county governments on how to get approval.

“Previously there was no legal policy that allowed KeNHA to charge for the billboards, however, we are currently working on one that will see as start charging on such services because all the road reserves belong to the national government, the county government roles will now be issuance of the licence,” Mr Otiato told the Business Daily on the sidelines of the ongoing Kenya Connected Summit in Kwale County.

“The policy is based on the legal notice 86 of June 2013.”

Ballooning budget

Analysts reckon the plans by KeNHA are likely to trigger a tussle for revenue with local authorities that currently rake in billions of shillings from advertisers every year.

A county such as Mombasa currently charges Sh180 000 as annual ground rent for a billboard on a road reserve and Sh120,000 on private property.

The county also charges Sh100,000 for billboard development, while the application fee to erect one is expected to rise from Sh2,000 to Sh75,000.

Most counties revised their rates to meet their ballooning budgets and help boost revenue collections.

Last year, Outdoor Advertising Association of Kenya went to court to block Nairobi County from increasing its billboard charges.

The court temporary stopped the county government from reviewing upwards fees charged on billboards.

High Court judge Isaac Lenaola when issuing the temporary order said that the planned increase was unlawful and unconstitutional because the stakeholders were not consulted as required by the law.